SADDLEBROOK ESTATES COMMUNITY ASSOCIATION, INC.
CITY OF SUFFOLK
TRIAL AND APPEAL HANDLED BY INMAN & STRICKLER
On June 1, 2016, the Supreme Court ruled on a case decided by a Suffolk Circuit Court Judge regarding the taxation of open space in a homeowners association. The Court unanimously overturned the Circuit Court ruling finding that the judge misinterpreted the law by upholding the City’s taxation of the Association’s open space. This decision provides an interpretation of a statute that applies to all POAs which have open space designated on their subdivision plats, whether leased to a third party or used by the association members for recreation or otherwise.
The Supreme Court stated that a Virginia taxation statute requires that there can be no real estate tax levied on open space, or any portion thereof but, rather, the value of that open space is to be allocated to the lots in the subdivision which have the benefit of that open space in accordance with recorded documents. The community of Saddlebrook Estates has a unique situation where an equestrian center, including stables and paddocks, is operated on a large portion of the open space as contemplated when development of the community was approved by the City. The Association leases the facilities to an operator which is responsible for maintenance of the facilities and grounds.